While I find dividends exciting, growth stocks can be equally thrilling. With enough research, I think I can find high-quality companies to add to my portfolio and hold for the long term. I’ve trawled through the indices to discover two of the best businesses enduring a share price dip, so let’s take a closer look.
A strong balance sheet
Shares in Eurasia Mining (LSE:EUA) have been extremely volatile. At the time of writing, they’re trading at 7.5p, down 21% in the past three months.
Much of the recent share price movement has been due to the firm’s exposure to, and operation in, Russia. Given the ongoing conflict, this has complicated its ability to conduct business in Europe and the US.
The company – a precious metals and platinum group metals (PGMs) miner – hasn’t been profitable recently, registering a pre-tax loss of £3.14m in 2021.
However, there could be rising demand for PGMs in the coming years. These metals, including platinum and palladium, have important uses in efforts to decarbonise, like electric vehicles and solar panels.
Furthermore, the business is still in the process of striking a deal to potentially sell nearly all its assets. An unnamed buyer has completed due diligence and the market awaits an update. A successful deal could be great news for the shares. This deal may involve the sale of much of the firm’s PGM and base metal holdings.
Eurasia Mining also has a total cash balance of £19.15m and debt of just over £400,000. This strongly indicates to me that it’s in a financially healthy state.
Rapid earnings growth
Second, I’m attracted to Keywords Studios (LSE:KWS). In the last month, the shares are down 11.3% and currently trade at 2,376p.
Over a five-year period, the video games firm has produced improving earnings results. Between 2017 and 2021, earnings per share (EPS) grew from ¢31.18 to ¢89.24. By my calculation, this results in a compound annual EPS growth rate of 23.4%.
In a report for the six months to 30 June, the business expects interim revenue to hit €320m, up 34% year on year.
Additionally, it expects pre-tax profit to climb to €54m, up 35%. This is a strong indication that the company is performing even in the midst of a challenging operating environment. However, the business may begin to feel the impact of inflation in the near future. Despite this, the firm announced the acquisition of Mighty Games and Forgotten Empires, both of which could allow Keywords Studios to tap into new markets. This could ultimately be good news for the share price.
Overall, both of these companies have exciting growth potential, especially during a market dip. With their share prices down recently, I think now could be a good time for me to stock up on shares at low levels. As such, I’ll be adding the shares of both firms to my portfolio soon.
